Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
We begin with geopolitics and US China relations. That is the focus as Treasury Secretary Janet Yellen attends G twenty meetings in India, and as Climate Voyd John Carey holds talks in Beijing. Bloomberg Stephen Engel has the latest from Hong Kong.
This is another opportunity to continue this diplomatic push that we've seen obviously from the cabinet members of the Biden administration. You've had Blinking go to Beijing, you had Yellen go to Beijing. Yellen also, of course, keep in mind, went to Japan G sevens or her engagement with the Asia Pacific is intensifying. This will be her third trip to
India in the last nine months. You know, she says India is an indispensable partner in the Biden administration policy of friendshoring and securing supply chains and diversifying away perhaps from over reliance on China. But the main story again really with Kerrie and Beijing and Yellen in GEN twenty is really to find ways, and these are her words, to find ways to further de escalate tensions with China.
And Bloomberg Steven Angel reporting from Hong Kong. We've already heard from Janet Yellen at those G twenty meetings. The Treasury Secretary says it's too early to eliminate Trump era tariffs on China.
Perhaps over time this is an area where we could make progress, but I would say it's premature to use this as an area for de escalation, at least at this time.
Yellen says she wants to work with China on areas of mutual interest, including a dead restructuring for poorer countries.
China's economy is also in focus this morning, Karen, thanks to some disappointing data overnight. Bloomberg Daybreak Asia anchor Brian Curtis has the details. From Hong Kong.
GDP grew six point three percent from a year ago, weaker than the forecast of seven point one percent. The figures were distorted as last year, Shanghai and other areas were in lockdown. Sequentially, GDP was up just zero point eight percent from the first quarter. In the monthly data, June retail sales advancing three point one percent, lower than forecast. However, a factory output was a relative bright spot, gaining four point four percent and beating estimates. More stimulus might be coming,
but today the BBOC stood pat in Hong Kong. Brian Curtis, Bloomberg day Break.
All right, Brian, thanks well. Turning to the US economy, there will be no news from the Fed this week. Central bankers are in a quiet period until next week's policy decision. Despite last week's positive inflation data, former FED Vice Chairman Richard Clarina still expects a quarter point rate hike.
Quite frankly, the Fed several times in the last several years, including when I was there, got burned when they looked at data that was improving and extrapolated that. So I think this committee will certainly be wary of declaring mission accomplished and victory, but clearly they'd rather have data like last weeks than some of the numbers we were getting earlier in the year.
And former Fed Vice Chairman Richard Clarina, who is now a Global Economic advisor at Pimco, tells US market bets on a ray cut next March makes sense.
On the earnings Frontcaren, It'll be another busy week. JP Morgan Chase, Wells, Fargo and City Group posted strong results on Friday. Now we get word from the other big banks. Bloomberg's Charlie Pellett has more.
More financials will be reporting this week, including Goldman, Sachs, Morgan, Stanley, and Bank of America. The flood of earnings reports come amid questions about whether earnings expectations justify the outlook for stocks. Laura Cooper is senior investment strategist at black Rock International.
We really have seen that better than expected earnings backdrop be a key tailwind for equity markets, and I struggle to see that trend persisting in the second half of the year.
This week, we'll also be hearing from Railroads, CSX, UAL, IBM, Johnson and Johnson, Lockey, Martin, Netflix, and Tesla in New York. Charlie Pellett Bloomberg Daybreak.
All right, Charlie, thank you well. We turn to politics now and the ban of the Republican presidential nomination. Florida Governor Ronda Santis is hitting the reset button on his campaign. Bloomberg's Amy Morris repports from our ninety nine to one newsroom in Washington.
While desandis looked to many like the guy who could defeat Donald Trump for the Republican nomination. His campaign did not expect how Trump's two indictments would energize his baits. Seven weeks into Dessanta's official launch for the White House, he's fired staffers, changed his media strategy, and streamlined his travel schedule. Sources tell Bloomberg that at this point, no
campaign staffers should assume that their job is safe. Next, his first major TV interview with a non conservative outlet CNN, is set for tomorrow in Washington. I Mamy Morris, Bloomberg.
Daybreak, Okaymie, thanks being time. Another Republican candidate, Chris CHRISTI he's trying to turn the heat up on Donald Trump. Bloomberg's Ed Baxter has that story.
Trump says he doesn't know if he'llotown the debates. Christy says he thinks he'll be there.
His ego, I think will not permit him to have a big TV show that he not on, and I think he'd be enormously frustrated sitting back at Bedminster and watching what I'm going to do to him.
Over the weekend. Trump said, when he gets indicted, he's doing it for the American people.
He's a liar and a coward.
He's not getting indicted for anyone other than because of his own conduct.
Christie's latest ads called Trump Chicken in San Francisco. I'm at Baxter Bloomberg Daybreak.
Okay, and thank you by the way. Chris Christy made those comments on ABC's This Week. You can catch the show every Sunday on Bloomberg Radio. Man, it's sound time to take a look at some of the other stories making news in New York and around the world with Bloomberg's Michael bar Good morning, Michael.
Good morning, Nathan. New York Governor Canthy Okle said heir quality health advisories are being issued for today for the entire state. Hokele says residents with breathing issues, the very young and old should stay inside today due to drifting smoke from Canada's wildfires. Governor Hokele spoke during a news conference Sunday.
It's likely to be healthy for sensitive groups.
As our orange category again normal is zero to fifty, We're expecting.
Tomorrow to be one hundred to one hundred and fifty on the air Quality Index.
The smoke is expected to cause the air quality index to reach levels upstate that are unhealthy for all people. A cluster of severe thunderstorms pound at the nation's northeast over the weekend unleashed heavy flooding in Pennsylvania and halted operations at several airports. At least five people died and two children were still missing after floods ripped through Bucks County, Pennsylvania, north of Philadelphia. Pennsylvania Governor Josh Shapiro.
On behalf of more than thirteen million Pennsylvanians. I want Bucks County to know that we are here with you, we are praying with you, and we will continue to do everything in our power to lift you up.
Governor Shapiro says. It is a devastating blow to the community. Fourteen states are under heat watches and warnings today. In Arizona, temper have been one hundred and ten degrees or more for seventeen straight days. This woman brought her young child to a water park in Phoenix to cool off.
We had in years where it's been wet and cooler, but overall it's just spun hotter and hotter over time.
El Paso, Texas has seen triple digit temperatures for thirty consecutive days. Traffic on a key bridge connecting Crimea to Russia's mainland has been halted after reports of explosions that Crimean officials say were from a Ukrainian attack. The bridge was damaged in October by a truck bomb and required months of repairs before resuming full service. In this tragic news finally about a New York CBS to meteorologist Elise
Finch died suddenly over the weekend. Finch was just on the air a day or two before her Heartbroken colleagues called her a gifted and consummate professional. Her cause of death has not been determined. Elise Finch was fifty one global news twenty four hours day, powered by more than twenty seven hundred journalist analysts in over one hundred and twenty countries. I'm mich Labar. This is Bloomberg, Nathan.
Thank you, Michael. Time now for the Bloomberg Sports Update with John Stanshauer.
All right, Nathan, next tore innings for the Mets and Yankees. The Mets at City Field waited through a four hour rain delay, and then their bats were again quiet, but Luis Ki or May with a base hit tenth Inny to beat the Dodgers two to one, any the Mets four game losing streak. In the three games with La they only scored three runs. Meanwhile, dreadful loss for the Yankees in Denver. They led three to one, then trailed five to three as C. J. Crohn hit an eighth
inning grand slam for the Rockies. Yanks were then back ahead seven to five in the eleventh Colorado with a two run homer to tie the game in a solo shot to win eight to seven. Yankee bullpen, which had been a strength, has an eighty RA in the last eight games. The Yankees are tied for last place and now they have to deal with sho heey Otani. They visit the Angels tonight. Are the Giants gonna sign Saquon Barkley to a long term deal before we're the four
o'clock today deadline? And if not, does he agree to play on the franchise tag er? Is he going to be a holdout? Here were the most recent comments made by Giants GM Joe Shane.
How we want to build this team and allocate our resources and that's that's what it comes down to you.
So again, he's a good football player. He was durable for this suit this year. He played well and you know again he's He's a guy that.
We'd like to have back, the question being at what price. DeAndre Hopkins became a free agent when released by Arizona. He's going to sign with Tennessee and Wimbledon. The twenty year old Spaniard Carlos Alcarez, playing a grass court tournament for only the fourth time, prevailed in five sets over Novak Djokovic was going for his twenty fourth Grand Slam title, fifth in a row at Wimbledon. Alcarez the third youngest
to win in the Open era. And what a weekend on the golf course for Steph Curry at the celebrity event in Lake Tahoe, a hole in one Saturday and then on the last hole in eagle putt to win the tournament. John Stashiellward Bloomberg.
Sports from coast to coast, from New York to San Francisco to Washington, DC, nationwide on Syrias, Exam, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. More signs of slow down in China's economy weighing on global markets this morning, but for US investors, the focus may be on the earnings outlook as the Federal Reserve goes quiet before its next policy decision coming up a week from Wednesday. So let's get you set for this trading week ahead. We're joined now by Dennis Gartman, the chairman of the University of Akron Indowment Investment Committee and the former publisher of the
Gartman Letter. Dennis, I've really been waiting to get your take on what this Fed could do next. After the positive reads we've gotten on inflation, there's still this expectation that we're going to get a rate hike at the end of this month. But is it going to be one and done? Should it be one and done?
It's probably going to be one and done. There's no question that they will raise the overnight that funds righted by twenty five basis points when they meet next week. That's absolutely beyond question. They've made it abundantly clear that will happen, whether they go another twenty five basis points that the September meeting is open for debate. I have my doubts as to whether they shall or not I think that five and a quarter to five and a half is probably as high as the terminal rate shall go.
And my guess is that we'll see probably some relatively weak employment numbers coming out over the course of the next thirty to sixty days. That'll be enough to keep the seat from moving in September, but it will be a long time, a very long time, probably late twenty twenty four before the Seat begins their policy of allowing the overnight SAD funds right to reduce. Now that's up twenty five basis points at the next meeting, and that may well be the end of it.
Yeah, we've heard that message from you for quite some time here that this market isn't pricing in the rate cuts the way you think they should.
Why is that?
Why do you think the market at this point is of fighting back against this idea that higher or that higher for longer longer isn't going to mean what the Fed is kind of indicated that it's going.
To It's a very good question, and it seems to be beyond my ken. I've when the FED began the policy of raising rates that almost two years ago, I said at that time that rates are going to go a lot higher, demonstrably a lot higher. And I actually said at the time that we'd probably see the FED funds rate get to four and a half or five percent before it was done, which seemed to be contrary
to almost what anybody who had had anticipated. And I've always said that when the FED begins the policy of changing rates from higher, from lower to higher, or from higher to lower, they take rates demonstrably farther and much for a much longer period of time than anybody wants to anticipate. Here we are two years later, and it's going to be at least another year before we before the FED begins the policy of allowing rates to decline.
Why they've been why the market has wanted to anticipate a quick return to easier FED policy is really quite beyond me, and it has made no historical sense whatsoever, and it has made no economic sense. It's caught me off guard. I'll be blunt.
What's the trajectory for commodities right now? Now that we're seeing continued signs of slow down in the Chinese economy and now indications this morning that the grain deal that's kept Black Sea grain coming out of from Ukraine could be expiring now.
That probably will expire, and that would be bearish for one would anticipate that the expiry of that agreement would be bearish for wheat prices, predominantly because of the importance of Ukrainian and Russian wheat to the world wheat market. But nonetheless, everybody understands that. I think that's a discounted circumstance, and it appears to me that commodity prices generally are extremely cheap relative to stock prices, which are extremely expensive.
I would err upon the side of owning commodities in broad terms, owning grains, owning livestock, owning cu oil, owning copper, owning tungsten, owning the base metal. I think commodities on balance are extremely inexpensive relative to stock prices.
Do you see that trend continuing even with inflationary pressures continue to ease, Yes.
I think so. I think we've been under pressure as far as commodity prices have been for the past year or so. The only commodity that has actually been going from the lower left the upright has been gold prices, and they've actually been coming down for the past two months. But on balanced, wheat prices have been under pressure. Corn prices have been under extreme pressure. Soybean prices have held on their own. Pay attention to the term structure of
the commodity markets. Soybeans are now inverted, Wheat is now inverted. Corn is the only commodity grain grain commodity that is not an inverted the term structure, So pay attention to the term structures, or upon the side of owning soybeans, or upon the side of owning wheat, and or upon the side of being negative or unbiased towards the corn market.
What nobody seems to be paying attention to is that live stock prices have been going from the lower left to the upper right rather consistently lately, and no one's paying attention to that. And the fact that copper prices have stopped going down and have started to turn from the has started to turn upward, which I think is indicative of global economic strength rather than global economic weakness.
So watch commodity prices. As I said earlier, they seem to me to be relatively cheap compared to extremely relatively expensive stock prices.
This is Bloomberg Daybreak today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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And I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak